RR Marcus assisted RR Marcus in selling nearly $18,000 in unregistered shares of a thinly traded penny stock into the public markets on customers’ behalf.  For starters, it cost them a combined $20,000.  Alan David was fined $10K, suspended 45 days.  Robert Michael was fined $10K, suspended one year. 

    What Went Wrong:  A.D. Marcus.  He acted as the RR for all these sales and failed to perform adequate due diligence prior to executing these sales, notwithstanding his duty to do so and the red flags indicating potential

violations of registration requirements of the Securities Act of 1933.  He allegedly failed to undertake adequate efforts to ascertain the information necessary to determine whether the customers’ unregistered shares could be sold in compliance with Section 5 of the Securities Act, and failed to determine how the customers came to obtain the stock or whether there was an applicable exemption to registration.

    What Went Wrong:  R.M. Marcus.  He participated in sale of unregistered shares of a thinly traded penny stock into the public markets on customers’ behalf.  While he was not the designated RR on customer accounts, he nonetheless assumed certain responsibilities for the accounts - e.g., determining whether securities sold from the accounts were freely tradable.  He allegedly failed to perform adequate due diligence prior to executing these sales, notwithstanding his duty to do so and the red flags indicating potential violation of registration requirements of the Securities Act of 1933.  He further allegedly failed to undertake adequate efforts to ascertain the information necessary to determine whether the customers’ unregistered shares could be sold in compliance with Section 5 of the Securities Act, and failed to determine how the customers came to obtain the stock or whether there was an applicable exemption to registration.   [FINRA August Disciplinary Action]